Boeing machinists approve contract tied to 777X

Union concedes some benefits to keep assembly in Puget Sound region

Jan. 4, 2014

Written by

Manuel Valdes

Associated Press

ABOUT THE 777X

Boeing began offering the new 777X airplane in May, and company officials have said they needed to move swiftly to decide where the plane will be built: It recently received orders for 225 new 777X planes from three airlines at the Dubai Airshow. • Boeing has said the 777X is expected to carry as many as 400 passengers and be more fuel-efficient than the current 777.

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SEATTLE — The stakes were high and the vote was close as Boeing production workers agreed to concede some benefits to secure assembly of the new 777X airplane for the Puget Sound region.

Washington state Gov. Jay Inslee and Boeing hailed Friday’s vote, which proponents said solidifies the aerospace giant’s presence in the Seattle area.

“Tonight, Washington state secured its future as the aerospace capital of the world,” Inslee declared.

Under the terms of the eight-year contract extension, Boeing said the 777X and its composite wing will be built in the Puget Sound area by Boeing employees represented by the Machinists union.

“Thanks to this vote by our employees, the future of Boeing in the Puget Sound region has never looked brighter,” Boeing Commercial Airplanes President and CEO Ray Conner said. “We’re proud to say that together, we’ll build the world’s next great airplane — the 777X and its new wing — right here. This will put our workforce on the cutting edge of composite technology, while sustaining thousands of local jobs for years to come.”

Local officials of the International Association of Machinists and Aerospace Workers had urged their 30,000 members to oppose the deal, arguing that the proposal surrendered too much at a time of company profitability. They had opposed taking a vote at all but were overruled by national leaders in the Machinists union.

Opponents of the contract objected to the idea of freezing the Machinists’ pensions and moving workers to a defined-contribution savings plan. Defined-benefit pensions pay employees a guaranteed amount each month in retirement based on years employed and salary level, while defined-contribution plans shift responsibility for retirement savings to employees and are linked to market performance.

The announcement that the contract had passed with a 51 percent yes vote was somber.

“Our members have spoken, and having said that, this is the course we’ll take,” Jim Bearden, administrative assistant for Machinists District 751, said in announcing the results. “No member liked this vote or the position we were put in by the company, nor was it an easy vote for anyone to cast.”

The issue fractured the union and drew unusual pleas from politicians who said the deal was necessary to support the area’s economic future. Boeing has been exploring the prospect of building the 777X elsewhere, a move that could trigger a steady exodus of aerospace jobs from the place where Boeing was founded.

“We missed it by 1 percent because people were confused and worried about their jobs,” said Rick Herrmann, who has been working at Boeing for 46 years.